China's UltiZen games announced today that it has acquired Red Entertainment. It plans on working with its new wholly owned subsidiary to co-develop PC and smart phone games.

UltiZen provides outsourcing services for video game development and also runs the game portal service 365UB. Founded in 2005, it has studios in Shanghai, Beijing and Suzhou, and offices in Los Angeles, London and Kyoto.

Red is the creator of such franchises as Sakura Taisen and Tengai Makyo. It typically works with publishers like Sega to release its games.

In a statement issued by UltiZen today, Red Entertainment CEO Yasuaki Nagoshi said of the deal, “It is the quality and innovation of our talents that made Red into one of the most well-known studios in Japan. The sharing of development and creative expertise between UltiZen and Red will position the two companies at the head of the pack in an entertainment industry in rapid evolution.”

Games emerging from the two firms will be part of a "Produce in Japan, Made in China" strategy, which UltiZen says is a world's first. Five collaborative titles are being developed by the two firms this year.